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76 Fatimah Furaiji, Małgorzata Łatuszyńska, Agata Wawrzyniak

10.5709/ce.1897-9254.52DOI: CONTEMPORARY ECONOMICS

Vol. 6 Issue 3 76-862012

This study contributes to a deeper understanding of the impact of different factors on consumer buying behaviour. It analyses the relationship between several independent variables, such as cul-tural, social, personal, psychological and marketing mix factors, and consumer behaviour (as the dependent variable) in the electric appliances market.

The purpose of this study is to determine the factors affecting consumer preferences and behav-iour in the electric appliances market in Iraq. The data employed to analyse the factors influencing consumers’ purchase decision-making processes were obtained through a questionnaire that was conducted in December 2011 in Basra, a city in southern Iraq. The major findings of the study indicated that, overall, the set of independent variables are weakly associated with the dependent variable. However, the in-depth analysis found that social factors, physical factors, and marketing mix elements are strongly associated with consumer buying behaviour. These analyses make it pos-sible to discover consumer decision-making rules. The results may assist producers and retailers in understanding consumer behaviour and improving consumer satisfaction.

Introduction For companies to attain commercial success, it is im-portant that managers understand consumer behav-iour. The relationship between consumer behaviour and marketing strategy is emphasised because the suc-cess of companies’ marketing strategies depends upon managers’ understandings of consumer behaviour (understanding of consumer behaviour is especially important during a recession – see Kotler and Caslione (2009). Consumer buying decisions indicate how well

the company’s marketing strategy fits market demand. Thus, marketing begins and ends with the consumer.

The study of customer behaviour is based on con-sumer buying behaviour, with the customer playing three distinct roles: user, payer and buyer. Research has shown that consumer behaviour is difficult to predict, even for experts in the field (Armstrong & Scott, 1991). Con-sumer behaviour involves the psychological processes that consumers go through in recognising their needs, finding ways to solve these needs, making purchase de-cisions (e.g., whether to purchase a product and, if so, which brand and where), interpret information, make plans, and implement these plans (e.g., by engaging in comparison shopping or actually purchasing a product).

An Empirical Study of the Factors influencing Consumer Behaviour in the Electric Appliances Market

Primary submission: 10.03.2012 | Final acceptance: 12.06.2012

ABSTRACT

D1, M3

KEy woRdS:

JEL Classification:

financing structure, selection of financing sources, financial crisis

1 Basra University, Iraq2 University of Szczecin, Poland

Corespondence concerning to this article should be addressed to:

[email protected]

Fatimah Furaiji1, Małgorzata Łatuszyńska2, Agata Wawrzyniak2

Vizja Press&ITwww.ce.vizja.pl

77An Empirical Study of the Factors influencing Consumer Behaviour in the Electric Appliances Market

Consumer behaviour research attempts to understand the buyer decision-making process, both individually and collectively. It studies individual consumer character-istics such as demographics and behavioural variables in an attempt to understand people’s wants. Consumer be-haviour research allows for improved understanding and forecasting concerning not only the subject of purchases but also purchasing motives and purchasing frequency (Schiffman & Kanuk, 2007).

One of the current fundamental assumptions in con-sumer behaviour research is that individuals often pur-chase products for their subjectively perceived values rather than their primary functions (Stávková, Stejskal & Toufarova, 2008). This does not mean that the products’ basic functions are not important, but that the contempo-rary role of a product is more than its basic use-value (Sol-omon, 2004). Frequently, consumers do not rate products according to their core attributes (i.e., the primary utility they provide) but, above all, according to the so-called real product (i.e., a particular products’ qualities) and the extended product, which represents the set of intangible factors that confer a desired perceived advantage on the consumer – including image, consultancy, and after-sale service (Foret & Procházka, 2007).

In sum, modern marketers first attempt to under-stand consumers and their responses and then study the

basic characteristics of their behaviour. Studying con-sumer behaviour helps to ascertain who the customers are, what they want, and how they use and react to the product. The wants of the customer are carefully studied by conducting surveys on consumer behaviour.

Factors Influencing Consumer BehaviourThe stimulus-response model (or the black box model) is a well-developed and tested model of buyer behav-iour and is summarised in the diagram below (see fig. 1.). The black box model shows how stimuli, consumer characteristics, decision processes and consumer re-sponses interact. The stimuli can be distinguished between interpersonal stimuli (between people) or in-trapersonal stimuli (within people) (Sandhusen, 2000, pp. 218-219). The black box model is related to the black box theory of behaviourism, where the focus is not on the processes inside a consumer but the rela-tionship between the stimuli and consumer responses. Marketing stimuli are planned and produced by firms, whereas the environmental stimulus is generated by social factors, based on the economic, political and cultural circumstances of a society. The buyer’s black box contains the buyer’s characteristics and the deci-sion process, which determines the buyer’s response.

Fig. 1: The Black Box Model of Consumer Behaviour

Source: own elaboration based on Keegan et al. (1992: 193)

Marketing mix

• Product • Price • Place• Promotion

Other

• Demographic • Economic • Situational • Social• Lifestyle

Internal influences

• Beliefs/attitudes/values • Learning • Motives/Leeds • Perception • Personality • Lifestyle

Decision-making process

• Problem solving • Information search • Alternate evaluation • Purchase • Postpurchase evaluation

Purchase

• Product • Brand • Source • Amount • Method

of payment

No purchase

EXTERNAL STIMULI BLACK BOX (BUYER’S MIND) RESPONSES

Figure 1. The Black Box Model of Consumer Behaviour. Adapted from “Marketing” by W. Keegan, S. Moriarty, T. Duncan, 1992, p. 193. Englewood Cliffs, NJ: Prentice-Hall.



Vol. 6 Issue 3 76-862012

In the above model, marketing and other stimuli enter the customer’s “black box” and produce certain responses. The aim of marketing management is to discover what goes on the in the mind of the customer – the black box. The buyer’s characteristics influence how s/he perceives the stimuli; the decision-making process determines what buying behaviour is under-taken. The first step in understanding buyer behaviour is to focus on the factors that determine the buyer’s characteristics in the black box model.

Many factors influence a consumer’s purchasing deci-sions and buying behaviour. The literature classifies and structures these factors in various ways (see table 1.). Despite these differences, consumer behaviour is gener-ally influenced by factors that can be classified into five groups: cultural factors, social factors, physical factors, personal factors and the marketing mix. A description of the major factor groups is presented in table 2.

These factors are identified to discover the impacts they have on consumer behaviour and assist marketers

with selecting consumer targeting strategy. Therefore, these factors are used to segment the market and target specific consumer groups. The aim of this paper is to understand the influences of the factors that were mea-sured in a survey on purchasing behaviour.

Types of Consumer BehaviourStudies suggest that customers generally go through a five-stage decision-making process whenever they make a purchase. This is summarised in fig. 2. The model implies that customers pass through all of the stages in every purchase. However, in more routine purchases, customers frequently omit or reverse some of the stages. The buying process begins with need recognition. At this stage, the buyer recognises a problem or need or responds to a marketing stimulus. Next, the consumer needs to de-cide how much information (if any) is required to make the decision. If the need is strong and a product or service that meets the need is easily available, a purchasing deci-sion is likely to be made immediately. If this is not the

Table 1. Factors Affecting Consumer Buying Behaviour – Literature Review

Researcher Major factors

Enis (1974) personal factors, social factors

Cross and Peterson (1987) social factors, physical factors

Dibb and Etal (1991) personal factors, social factors, physical factors

Cohen (1991) marketing mix, physical factors

Zikmond and Amico (1993) social factors, environmental factors, individual factors

McCarthy and Perreault (1993) physical factors, social factors

Narayyana and Raol (1993) physical factors, social factors, cultural factors

Keegan (1995) social factors, cultural factors, economic factors, geographic factors

Setlow (1996) personal factors, marketing mix, environmental factors

Stanton (1997) social factors, physical factors, attitudinal factors

Lancaster and Reynold (1998) physical factors, social factors, cultural factors

Kotler and Armstrong (2007) physical factors, social factors, cultural factors, personal factors

Straughan and Roberts (1999) demographic factors, lifestyle

Pride and Ferrell (2000) social factors, physical factors, attitudinal factors

Note: Own elaboration based on Obaidat, 1995; Stávková, Stejkal, Toufarová, 2008; Suleiman, 2000.



Table 2. Major Factors Affecting Consumer Behaviour

Major factor Sub-factors description

Cultural factors

CultureFactors refer to the set of basic values, wants and behaviours learned by a member of a society from the family and other important institutions.

Sub-cultureEach culture contains smaller sub-cultures. Sub-culture includes nationalities, religions, racial groups and geographic regions.

Social classSociety's relatively permanent and ordered divisions, the members of which share similar values, interests and behaviours. Social class can be determined by a combi-nation of occupation, income, education, wealth and other variables.

Social factors

GroupsGroup refers to 2 or more individuals who interact to accomplish individual or mutual goals. A person's behaviour is influenced by many small groups or reference groups. These groups involve family, religious groups, friends circle, neighbours etc.

FamilyMembers can strongly influence a buyer's behaviour. Marketers are interested in the roles and influences of the husband, wife and children on the purchase of different products and services.

Roles & statusThe person's position in each group can be defined in terms of both role & status. Each role carries a status that is conferred by society.

Personal factors

Age & life cycle stagePeople change their purchases over their lifetimes. Marketers define their target markets in terms of family life-cycle stage and develop appropriate plans and products for each stage.

Occupation A person's occupation affects the goods and services bought.

Economic situationA person's economic situation affects product choice. Marketers of income-sensi-tive goods should monitor trends in personal income, savings and interest rates.

Psychological factors

MotivationWhen a consumer recognises that they have a need, the inner drive to fulfil the need is called motivation. A motivated person is ready to act.

PerceptionIt is the process by which people select, organise and interpret information to form a meaningful picture of the world.

LearningWhen people act, they learn. Learning can be described as changes in an indi-vidual's behaviour arising from experience.

Marketing mix

ProductIt is a tangible good or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units.

Price The price is the amount a customer pays for the product.

PromotionIt represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements: advertising, public relations, personal selling and sales promotion.

PlacementA way of getting the product to the consumer and/or how easily accessible it is to consumers.

Note: Own elaboration based on (Hasslinger, Hodzic, Obazo, 2007; Kotler and Armstrong, 2007; Stávková, Stejkal, Tou-farová, 2008.



Vol. 6 Issue 3 76-862012

case, the information search process begins. A customer can obtain information from several sources: personal sources (family, friends), commercial sources (advertis-ing, retailers, packaging), and public sources (newspa-pers, magazines, radio, television, Internet). The useful-ness and degree of influence of each of these sources of information will vary by product and by consumer. It is worth noting that marketers today have a greater degree of control over the information that is provided (or is not provided) to consumers and the manner in which this in-formation is presented (Kivetz & Simonson, 2000).

In the evaluation stage, the customer must choose between alternative brands, products and services. An important determinant of the extent of the evaluation is whether the customer feels “involved” in the prod-uct. A buyer’s level of involvement determines why s/he is motivated to seek information about a particular product or brand while virtually ignoring others. The involvement level, as well as other factors, affects an individual’s choice of one of three types of consumer buying behaviour: routine response behaviour, lim-ited decision making, and extended decision making (Pride & Ferrell, 2007, pp. 177-179). Table 3 presents a comparison of the behaviour types.

A consumer uses routine response behaviour when buying frequently purchased, low-cost items that de-mand very little search-and-decision effort (e.g., milk, eggs, bread or socks). Customers spend very little time deciding whether to purchase these items and do not typically need to read reviews or consult with friends for their opinions before making routine purchases. However, when confronted with ‘ethical’ products, consumers often become more involved, and this results in a more extensive information search (Car-rigan & Attalla, 2001; Zander & Hamm, 2011). These are usually small purchases, on the lower end of the pricing spectrum. When buying such items, consum-ers may prefer a particular brand but are familiar with several brands in the product class and view more than one as being acceptable. Typically, low-involvement products are bought almost automatically.

Limited decision making is a combination of an extensive purchase decision and a routine one. Con-sumers who participate in this type of buyer behaviour typically know what type of product they want but are attempting to select a brand. Purchasing clothing is a good example of how limited decision making works. A customer who needs a new pair of jeans goes into a store looking for jeans but investigates a variety of brands to determine which pair is the best fit. When customers engage in purchases that require limited de-cision making, they may seek advice or a suggestion from a friend. This type of decision making requires a moderate amount of time for information gathering and deliberation. The search is not as thorough or as time consuming as it is with higher priced items.

The most complex type of buying behaviour, extended decision making, occurs when purchasing unfamiliar, ex-pensive, or infrequently purchased products (e.g., a com-puter, television, car or house). Consumers spend sub-stantial amounts of time researching a large number of potential options before they buy. They speak with trust-ed friends, family, colleagues and sales professionals and read reviews and ratings online and in consumer maga-zines. Consumers participating in an extended decision-making process typically take more time to make a final purchase decision and spend more time researching their options. Many of these consumers experience cognitive dissonance. Extended decision making is frequently used for purchasing high-involvement products.

Purchasing a particular product does not always elicit the same type of problem solving process. Most consumers occasionally make purchases solely on im-pulse, rather than on the basis of any of these three buying behaviours. Impulse buying is an unplanned decision to buy a product or service, made just prior to a purchase. Such purchases range from small (choco-late, candy, gum) to substantially large (clothes, jew-ellery, art) and sometimes lead to problems such as financial difficulties, family disapproval, or feelings of guilt or disappointment (Business Dictionary, 2012). For more information on this topic, see Wood (2005).

Fig. 2: Consumer Buying Decision Process

Source: own elaboration based on (Pride and Ferrell, 2007; Hansen, 2005)

Problem recognition

Information search

Evaluation of alternatives

Purchase decision

Postpurchase evaluation

Figure 2. Consumer Buying Decision Process. Own elaboration based on Pride and Ferrell, 2007; Hansen, 2005



A Study of the Factors Influencing Consumer Behaviour in the Electric Appliances Market

Study Goals and ObjectivesThe purpose of this study is to determine the factors that affect consumer preferences and behaviour in the electric appliances market in Iraq. There are few stud-ies related to these products, and this is the first study that has attempted to explore the growing electric ap-pliances market in this country. In Iraq, there are few researchers who are interested in consumer behaviour, and the studies in this area are scarce and inadequate. Researchers working on the topic of consumer be-haviour and competition in the Iraqi market are Abo Ahmad (2004), Abood Al-Janabi (2000), Ibrahim and Husin (2009). Furthermore, researchers such as Jtheer, Al-Mosssawi and Hussen study and measure consumer behaviour regarding drugs using a sample of consum-ers in Baghdad , (Jtheer, Al-Mosssawi, Hussen, 2009).

Study MethodologyThe aim of the survey was to obtain information re-garding the influences of the above-mentioned factors (see table 2.) on consumer behaviour when consumers purchase electrical appliances. After completing the literature review, the authors of the paper decided to create a research model (fig. 3.) and implement it to understand and analyse how Iraqi consumers made purchase decisions in the electric appliances market.

The graphical research model can be written in mathematical form. The mathematical model of the research is stated below:

FactorImpactOnBehaviorc,t=α0+β1Culturalc,t+β2Socialc,t+β3Personalc,t+β4Psychologicalc,t+β5Product,t+ +β6Pricec,t+β7Promotionc,t+β8Placec,t+εc,t

where:α – constant,ε – model error,c – consumer,t – making a purchase at a particular time.

The hypotheses formulated after reviewing the relevant literature are presented below:H1: cultural factors have a strong association with con-

sumer behaviour.H2: social factors have a strong association with con-

sumer behaviour.H3: personal factors have a strong association with

consumer behaviour.H4: psychological factors have a strong association

with consumer behaviour.H5: the product factor has a strong association with

consumer behaviour.H6: the price factor has a strong association with con-

sumer behaviour.H7: the promotion factor has a strong association with

consumer behaviour.H8: the place factor has a strong association with con-

sumer behaviour.Tests of the hypotheses were confined to the primary data collected from the area of Basra (the second larg-est city in Iraq with an estimated population of two million).

Table 3. Comparison between Types of Behaviour

Routine response behaviour Limited decision making Extended decision making

Level of involvement low low high

Product cost low low to moderate high

Brand preferencemore than one is acceptable, although one may be preferred

several varies, usually many

Search effort little little to moderate extensive

Time spent short short to medium long

Note: Own elaboration based on Pride and Ferrell, 2007.



Vol. 6 Issue 3 76-862012

Figure 3. Research Model

Instrument and Study SampleThe data employed to analyse the factors influencing consumers’ purchase decision-making processes were obtained through a marketing survey. The instrument used to collect the primary data was a questionnaire. The authors selected this tool because of its numer-ous advantages. Because each respondent receives the same questions and an interviewer is not present, the process is identical for each respondent. One advan-tage of using a questionnaire is that it reduces errors made by an interviewer while recording the responses. Questionnaires guarantee confidentiality; hence, re-spondents act without any fear or embarrassment. Another advantage is that the interviewer, whose personal appearance, mood or conduct may influ-ence the results of an interview, is not present when the questionnaire is being completed (Burns, 2000, p. 566). Furthermore, a questionnaire is a quick and ef-ficient way to obtain information from a large number of consumers. However, designing a questionnaire is complex and time-consuming, and the quality of the data that are collected is determined by the quality of the questionnaire.

The authors intended that the questionnaire be simple and the questions straightforward and to the

point. The questions were divided into three segments as follows:1. questions on demographic information, including

characteristics such as age, education, income, and gender,

2. questions on the factors that impact consumers and consumer behaviour,

3. one question on brand loyalty.The second part of the questionnaire contained nine sections, and each section represented a variable in the research model (the independent, dependent, and intermediate variables). In this part responses were measured on a 5-point Likert scale, ranging from one (definitely disagree) to five (definitely agree). The third part of the questionnaire contained a single open-end-ed question about brand loyalty.

The survey was conducted in December 2011 in Basra, a city in southern Iraq, and 200 survey responses were gathered. However, after removing invalid data, 176 correctly completed, acceptable questionnaires re-mained for the analysis. The data were evaluated using specialised software – the Statistical Package for Social Sciences (SPSS) ver. 17.

Respondents in this study were asked to complete the questionnaire on a voluntary basis. Regarding income,



36% of respondents had monthly incomes in excess of 1 million Iraqi dinars (ID), 43% had monthly incomes between 500,000 and 999,000 ID and 21% received less than 499,000 ID per month. Concerning sex, 56% of the respondents were male and 44% were female. Of the 176 people who completed our questionnaire, 6.0% were be-tween the ages of 18-24, 28.5% were between 25-34, 34.0% were between 35-44, 21.5% were between 45-54 and 10% were over 55 years old. Regarding education level, the majority of respondents had received higher education (58.8%), 21.6% received secondary education, 12.6% received intermediate education, 5.0% received primary education and only 2.0% have no formal education.

Results and DiscussionCronbach’s alpha (a measure of internal consistency or how closely related a set of items are) was used to assess the inter-item reliability for each variable. As reported in table 4, Cronbach’s alpha scores were over 0.75, suggesting that the items have a relatively high degree of internal consistency (note that a reliability coefficient of 0.70 or higher is considered “acceptable” in most social science research (Hair et al., 2006)). These alpha scores are acceptable for an exploratory analysis, indicating that the factors within each vari-able are inter-related.

There was a relationship between each factor and type of consumer behaviour. This operation was di-vided into two parts as follows:1. The authors found Pearson’s correlation coefficients

between the variables associated with questions answered on the Likert scale such as social factors, psychological factors, marketing mix and consumer behaviour. As shown in table 5, the Pearson’s r for the correlation between each factor and consumer behaviour was positive. This means that as one vari-able increases in value, the second variable also in-creases in value. Similarly, as one variable decreases in value, the second variable also decreases in value. The values of the Person’s correlation coefficients in this study were rather low; there is not a strong relationship between the variables. The strongest correlation was between psychological factors and behaviour – 0.434. The significance (2-tailed) values were less than 0.05. Therefore, we can conclude that there was a statistically significant correlation be-tween each factor and consumer behaviour.

2. To find the relationship between cultural and per-sonal factors and different types of consumer be-haviour, a one-way ANOVA was used. Data that represented these factors were divided into three groups: education (a cultural factor), age and

Table 4. Reliability Statistics

Variables Cronbach’s Alpha

Cultural factors 0.81

Social factors 0.83

Personal factors 0.89

Psychological factors 0.75

Product 0.80

Price 0.79

Promotion 0.95

Place 0.83

Routine response behaviour 0.93

Limited decision making 0.92

Extensive decision making 0.95



Vol. 6 Issue 3 76-862012

VariablesBehaviour

Pearson’s Correlation Sig. (2-tailed)

Social factors 0.299 0.000

Psychological factors 0.434 0.003

Product 0.269 0.000

Price 0.293 0.000

Promotion 0.249 0.000

Place 0.206 0.000

Factors Types of behaviour SS df MS F Sig.

Education

Extensive decision making 1.916 4 0.479 0.764 0.550

Routine response behaviour 2.309 4 0.577 1.162 0.329

Limited decision making 17.904 4 4.476 0.750 0.559

Age




Monthly income




monthly income (personal factors). The outcome of the ANOVA is presented in table 6. The results reveal that there is not a statistically significant dif-ference between the influences of education and age on consumer behaviour (p>0.05). Only month-ly income has an impact on behaviour, and only under routine response behaviour. In this case, the F ratio is the highest (F=2.664) and the significance value was below 0.05 (sig.=0.034).

It was found out that there is a multiple regression between behaviour and all factors. The data presented in table 7 show the results of the multiple regression, which was used to learn more about the relationships between the independent variables and the dependent

variable. Testing the previously developed hypotheses developed provided results that made it possible to modify the research model as follows:FactorImpactOnB ehaviorc,t=α 0-β 1Cultural c,t+ β2Socialc,t-β3Personalc,t+β4Psychologicalc,t+β5Product,t++β6Pricec,t+β7Promotionc,t+β8Placec,t+εc,t

These modifications of the mathematical model in-dicate that hypotheses 1 and 3 are rejected because the relationships between the variables are weak (p>0.05). The other hypotheses are accepted based on the strong association among the variables (p<0.05). Psychological factors strongly affected behaviour. Psychological factors (β=0.43) influenced consumer

Table 5. Pearson’s Correlation of Variables

Table 6. One-way ANOVA

Note: SS – sum of squares, df – degrees of freedom, MS – mean square, F – F ratio, Sig. – significance value.



Hypothesis & relationship

Unstandardised coefficients

Standardised coefficients t-value Sig.

Verification results

B Std. error Beta

H1 cultural factors→behaviour -0.076 0.040 -0.136 -1.926 0.056 Rejected

H2 social factors→behaviour 0.181 0.041 0.299 4.387 0.000 Accepted

H3 personal factors→behaviour -0.055 0.031 -0.123 -1.738 0.084 Rejected

H4 psychological factors→behaviour 0.310 0.046 0.434 6.754 0.000 Accepted

H5 product→behaviour 0.179 0.046 0.269 3.924 0.000 Accepted

H6 price→behaviour 0.142 0.033 0.293 4.303 0.000 Accepted

H7 promotion→behaviour 0.158 0.044 0.249 3.607 0.000 Accepted

H8 place→behaviour 0.124 0.042 0.206 2.958 0.003 Accepted

behaviour more than social factors (β=0.30 and mar-keting mix. The relationship between personal factors and consumer behaviour was insignificant, with a p-value of 0.08. A similar result was obtained for the relationship between cultural factors and consumer behaviour (p=0.06).

Conclusions and Future ResearchThis research contributes to the understanding of consumer buying behaviour in the electric appliances market. The major findings of the study indicated that the overall set of independent variables was weakly associated with the dependent variable. However, the in-depth analysis found that social factors, physical factors, and marketing mix elements were strongly as-sociated with the buying behaviours of Iraqi consum-ers. These analyses make it possible to discover con-sumer decision-making rules. Moreover, our analysis helped us to identify several promising directions for future research. The primary goal of this future re-search will be to develop methodological bases for consumer behaviour analysis using Multi-Agent Based Simulation (MABS) and simulation tests using the de-veloped methodology. As a result of our research, we plan to develop a computer simulation model that will allow us to investigate consumer behaviour. The simu-lation model of the electric appliances market will be elaborated with a multi-agent approach.

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